This post sets out some background resources on state sector board governance. See also my post on state sector board appointments.
General Corporate Governance
The first port of call is general resources on corporate governance. While this material is typically expressed with private sector companies at front of mind, the governance insights and principles are largely applicable to state sector boards. Examples include:
- Corporate Governance in New Zealand – Principles and Guidelines (December 2014), a handbook for directors, executives and advisers published by the Financial Markets Authority. It states: “The principles outlined in this handbook can be generally applied to the governance of entities that have economic impact in New Zealand, or those entities that are accountable, in various ways, to the public.”
- Governance resources produced by the Institute of Directors in New Zealand and, in particular, their comprehensive reference guide, The Four Pillars of Governance Best Practice.
- The New Zealand Corporate Governance Forum Guidelines, “… designed as a contemporary governance reference for shareholders, chairpersons, directors and senior executives of listed companies.”
- Corporate governance resources produced for their clients by various professional services firms, such as PwC.
- Corporate governance topics discussed and shared on LinkedIn groups, such as those of the Institute of Directors in NZ, Tony@boardsense and many other LinkedIn groups that touch on topics relevant to governance.
- International corporate governance resources also have relevance in the New Zealand state sector context, such as the OECD, with its Principles of Corporate Governance and its other publications, reports and working papers on related topics.
- The Common Sense Corporate Governance Principles issued by the leaders of major US corporations in July 2016, and “… intended to provide a basic framework for sound, long-term-oriented governance.”.
- Other comparable jurisdictions, such as Australia (e.g., see ASIC, AICD & GIA), can also provide insights relevant in the New Zealand context.
- See also my post on the standard of governance.
State Sector Entity Governance
There are resources relevant to state sector entities as a whole, or to broad groups of entities, including:
- The State Services Commission provides a range of governance guidance and support material to help Crown entity boards and their members meet expectations. See also here and here.
- The Treasury’s Commercial Operations group monitors the government’s investment in companies and other entities owned by the Crown, assists with the appointment of directors, and provides performance and governance advice to Ministers. A key governance resource is the Owner’s Expectations Manual.
While most state sector entities are Crown entities under the Crown Entities Act 2004, which provides the legal framework for their governance, many also have their own legislation, which can modify the Crown Entities Act requirements.
For some entities, the balance is the other way, with their governance framework provided primarily by separate legislation and with only some provisions of the Crown Entities Act being applicable. For example, the Crown-owned companies listed in Schedule 4A of the Public Finance Act 1989 operate primarily under the legal framework of the Companies Act 1993 and are only subject to certain provisions of the Crown Entities Act.
Some other entities owned by the Crown are not Crown entities at all. They operate under different legal frameworks, such as:
- State Owned Enterprises, which operate under the State Owned Enterprises Act 1986, the Companies Act 1993 and other legislation that applies to companies and issuers.
- Mixed ownership model companies, listed in Schedule 5 of the Public Finance Act 1989, which operate largely under the Companies Act 1993 and other legislation that applies to companies and issuers.
In the case of a company, its constitution might also specify particular governance requirements. Company constitutions are publicly available from the New Zealand Companies Office Register.
A starting point for researching any particular entity’s specific governance arrangements would be to refer to its website, statement of intent, and annual report.
Finally, there is a wealth of insight of the nuances of state sector board governance that comes from reflecting on a range of direct experiences. A key resource to understand state sector governance is listening to, and discussing, the experiences of members of state sector boards, and of other stakeholders who interact with boards in a governance capacity, such as Ministers, advisers, senior executives, and auditors.
Please let me know if there are other resources I should mention.
[Updated July 2016.]